Manufacturing sector contracts in May: ISM

NEW YORK Mon Jun 3, 2013 10:03am EDT

A machine that makes bubble wrap padded envelopes is pictured at the Wrap-Tite manufacturing facility in Solon, Ohio July 13, 2012. REUTERS/Aaron Josefczyk

A machine that makes bubble wrap padded envelopes is pictured at the Wrap-Tite manufacturing facility in Solon, Ohio July 13, 2012.

Credit: Reuters/Aaron Josefczyk

NEW YORK (Reuters) - Manufacturing activity contracted in May for the first time in six months as new orders slipped and there was less demand for exports, an industry report showed on Monday.

The Institute for Supply Management (ISM) said its index of national factory activity in May fell to 49.0 from 50.7 in April, short of expectations for 50.7.

A reading below 50 indicates contraction in the manufacturing sector. The last time the ISM manufacturing index fell below 50 was November 2012, shortly after the U.S. east coast was hit by a massive storm.

The gauge for new orders dropped to 48.8 from 52.3, while a measure of employment edged down to 50.1 from 50.2. Production fell to 48.6 from 53.5.

The exports index fell to 51.0 from 54.0, while imports held up relatively better, slipping slightly to 54.5 from 55.0.

Though growth has cooled in recent months, before May the national reading had managed to stay in expansion territory, unlike some regional reports that have shown shrinkage.

Economic growth overall in the second quarter is expected to slow from the first quarter's 2.4 percent pace.

(Reporting by Leah Schnurr; Editing by Chizu Nomiyama)

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Comments (4)
JustProduce wrote:
Thankfully poor ISM performance is no-big-deal to our fearless leader in the White House. Remember that, in his words, businesses (like manufacturers) don’t create jobs; government does. Also note his prior remarks about how it is irrelevant if people behind companies try to earn business success or not since it is the country that gives success and not people’s efforts. Since he controls government, he will just raise taxes and will take care of any economic malaise.
I wonder how is he going to try to pin this one on George Bush. Or perhaps we will just be told that it is the result of an overzealous republican congress. Or even more probable, not one of the democrats will respond to this comment since they really do not read or care about any economic data anyway.

Jun 03, 2013 10:55am EDT  --  Report as abuse
divinargant wrote:
So I’m guessing that this means that the NFP print due out Friday will probably beat expectations of 165k mostly new temp. workers added to payrolls. Snafu in this Bermuda Triangle data point world we live in. Considering that this is the lowest print for national ISM since 6/09 while taking into account the sea of stimulus funneled through the market by we all know who, one word clearly comes to my mind for all the central planning efforts to boost growth for the broader population..FAIL.

Jun 03, 2013 10:57am EDT  --  Report as abuse
OzBolts wrote:
Wait… I thought Uncle Ben being at the printing press day-in, day-out was supposed to save all of us underclass slobs?

You mean the economy and the markets aren’t linked directly?

You mean the rich are getting richer off of QE while the rest of us wallow in a sea of debt, unemployment, loss of currency value and general recession-style bologna? And you mean to say that the most powerful and influential economy and markets in the world are affecting everyone else, too? Even if we’re not citizens of that nation?

Say it ain’t so, Ben!

I’m going to be ill if I see Obama talk about a successful “global economic recovery” one more time…

Jun 03, 2013 11:26am EDT  --  Report as abuse
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